Microsoft challenges 'Vista Capable' lawsuit

Calls for lawsuit to be suspended

Microsoft has asked for the 'Vista Capable' lawsuit to be suspended while it appeals a judge's decision to grant the case class-action status.

If granted, the motion would also postpone any new disclosures of potentially embarrassing company emails.

Last month, the release of similar documents showed that top-level company executives struggled with the new operating system on machines labelled 'Vista Capable', and that partners such as Dell warned Microsoft that the campaign would confuse consumers.

Microsoft has since petitioned the Ninth Circuit Court of Appeals to hear its challenge of the case's class-action status, which was granted two weeks ago by US District Court Judge Marsha Pechman. The company also filed a separate motion with Pechman on Thursday, asking her to stay the lawsuit's proceedings pending the appeal.

"Continued proceedings here would cost Microsoft a substantial sum of money for discovery and divert key personnel from full-time tasks," said Charles Wright, an attorney for Microsoft, in the motion to suspend the case. "[It] would intrude on sensitive pricing decisions and strategies by OEMs, wholesalers, and retailers; and would jeopardise Microsoft's goodwill with class members - all with respect to claims that might not proceed on a class basis at all."

The papers filed with Pechman claimed that Microsoft had already produced nearly 50,000 pages of internal documents as part of the lawsuit's discovery process. Continuing the case pending appeal would likely mean disclosing even more documents. If the class-action status is denied on appeal, Microsoft argued, the money spent digging up messages and memos would have been wasted, and any negative publicity generated needlessly.

Microsoft painted a picture of business secrets made public and damage done to its reputation. "Plaintiffs' discovery almost surely will involve intrusion into the most sensitive pricing decisions of the OEMs, wholesalers and retailers who sell the PCs at issue and set their prices," said the motion. "Continued discovery thus will disrupt Microsoft's relationships with its business partners, a disruption that will be unnecessary if the Ninth Circuit reverses."

Wright also contended that because the plaintiffs will have to do a national search for consumers who can join the class action, Microsoft might get a black eye for no reason. "The result will be nationwide publicity that impugns the [Windows Vista Capable] program," read the filing. "Although Microsoft fully expects to vindicate the program in the course of this litigation, allowing notice to proceed in the face of the pending appeal will jeopardise Microsoft's goodwill based on an Order that, Microsoft respectfully contends, might be held erroneous from its inception."

The company's petition to the Ninth Circuit spelled out two questions it thinks the appellate court should consider. The first was Pechman's decision to base the call for class-action status on Washington state law because Microsoft is headquartered there. The second questions Pechman's approval of a 'price inflation' theory, which argues that PC buyers paid more than they would have without the Vista Capable programme, since Microsoft's marketing boosted demand and increased the prices of systems that could run the lowest-priced and lowest-powered version of Vista, Home Basic.

Microsoft said it hoped to have a ruling on its appeal within 90 days, which would push back several tentative deadlines in the lawsuit, including a trial start in October, if the stay request is granted.